2. Sell on Amazon yourself.

Selling on Amazon along with selling to Amazon keeps Amazon honest and doesn’t allow the whims of their algorithm to lead to stockouts of your products.

Selling to Amazon also allows you to jump-start sales of new products by giving Amazon’s bots the confidence they need to start bringing it in themselves.

EDITOR'S NOTE

This practice is not recommended for most sellers, especially sellers that are novice to selling on Amazon.

Consult an Amazon consultant before using this method.

A Case Study: How to Sell to — and on — Amazon:

A sheet metal factory in the industrial space wanted to come out with a line of consumer products to sell on Amazon.

Based on some cursory searches on Amazon for sheet metal products and knowing the limits of their machinery, they created a simple folding work bench to be used in congested garages and sheds.

It was made with the machines they already had, hardware they were already buying and sheet metal they already stocked.

Actual Factory

Actual Prototype of Product on a Wall in a Factory Hallway

Their initial production run was four units.

Yup, four.

The total cost of labor and materials was less than most people’s weekly grocery bill.

They put up an Amazon listing and sold two units in the first week.

Actual Amazon Listing Taken Shortly After Product Went Live

After that first week and with lifetime sales of only two units, the sellers, who had created an account to sell directly to Amazon, offered the product directly to Amazon.

The price offered to Amazon was similar to the net amount the company received from Amazon when selling through Seller Central.

Since selling commission and shipping costs were no longer part of the equation, the sellers could sell their product to Amazon for significantly less than $149.95 without actually cutting into their margin.

Within a week of submitting the product, the company received an order from Amazon for five units.

Although Amazon’s Order Had Not Yet Shipped They Still Promoted the Product

Despite only two sales, the product moved to the third result in relevant keywords, in a similar position to items with as many as 138 reviews.

Of course, a sale of five items to Amazon is small time, but the idea of going from product concept to the top of the rankings on Amazon in a few weeks is possible.

It is highly unusual, but it is doable.

How to Make Money on Amazon – Checklist:

Identify what items make sense for you to sell on/to Amazon.

Check if the items are already sold on Amazon. Check interest and competition.

Compile the necessary information to submit those items to Amazon. Collect pictures, feature data, and descriptions.

Identify the processes an Amazon order will follow.

Search for and implement software services that simplify these steps.

Outsource any tasks that are not already performed and core to your business.

Clever Ways to Make a Profit on Amazon

Once you have become familiar with the inner workings of Amazon, you should take a step back.

Look at your business with just Amazon in mind and figure out which services or methods provide you the most benefit.

1. Dropshipping with FBM.

Adding non-stock or custom items to Amazon and then dropshipping to customers can add to your revenue, but it can also help reveal new trends or overlooked items that should be stocked as part of a standard offering.

Amazon Price Discrimination:

Play around by adjusting the price on Amazon to see what the effect has on volume.

Because pricing is relatively instantaneous, it is possible to offer a product at a variety of different price points so that in a few days or weeks a brand or retailer has a better idea of the optimal price.

This can be helpful because price tags and price sheets have a perceived permanency in the minds of consumers, but online prices do not.

Take advantage of this to test prices for better Amazon margins or velocities, and to optimize those numbers for sales outside of Amazon, like in a retail store or website.

If I didn’t know any better, I would think that the top two organic results for “Pour Over Coffee Stand” were really the same product sold at two different prices to test two different pricing strategies.

2. FBA for items sold outside of Amazon.

There is the implication that these items are likely also sold on Amazon, but that does not have to be the case.

Many sellers use Amazon’s fulfillment services to pick, pack and ship items that were sold elsewhere like a retail or online store.

This is done even when they may have stock in their warehouse.

Amazon’s shipping rates with the major carriers are so low that, even with the additional charges for picking and packing, their total shipment cost can be lower than negotiated carrier rates for many mid-market firms.

This can be true even for shipments within a company’s own state.

EDITOR'S NOTE

Sellers often use this service so they don’t have to split inventory for Amazon and non-Amazon channels.

James Thomson, former head of Selling on Amazon warns,

“If you use FBA to fulfill orders outside of Amazon (called multi-channel fulfillment), Amazon raises the shipping costs, and you aren’t likely to see much cost saving at all.”

Additionally, Amazon has extremely low 2-Day and Next Day rates, so during the end of the Christmas season, many sellers are able to offer quick shipping for reasonable prices by leveraging Amazon’s buying power.

Cost to Ship from a Warehouse Compared to Amazon Shipping the Same Item

Why not have Amazon ship every unit if you can save 25% in shipping fees, the cost of labor and materials by having them do everything?

Here’s an example from my own product set.

Offering Competitive Products

Odds are that you have competition – and that they are pretty successful, too.

Not only might you get better insight into their sales numbers and product features, but you’ll be getting paid to do it.

More sincerely, you probably have holes in your product line:

You don’t carry a certain color.

They have metric versions you don’t.

They have a unit that sells for under $100 and your cheapest offering is $119.

Even if you don’t offer the whole line, you may be able to generate more sales on your own site and on Amazon by extending your product line to include items your competitors offer for which you don’t have a substitute.

Look at these four different clothes dryer lint traps from four different manufacturers.

The only way to make money off of every version sold on Amazon is two win the Buy Box for each one like the seller below, Professional Grade Products.

Whether it is a specific bundle or the same item as normally available, but in a different box, many sellers see the best results by having a unique offering on Amazon.

Often, dealers or brands are only concerned about their products and not a brand’s or reseller’s version of a similar product.

In the example below, Vortex is selling the same product, but at a different price point to try to be true to their main “premium” brand, but also get more volume through a generic brand item.

The HUGE Opportunities in Private Labeling on Amazon

In the late 2000s, and continuing on today to a degree, most brands that had traditionally dominated big box retail channels shied away from selling on Amazon.

They feared having their items sold on Amazon would diminish their brand and annoy their existing retail partners.

This led to holes in Amazon’s catalog in many high-velocity categories because the brands that dominated that space everywhere else were not represented on Amazon.

Naturally, new “Amazon Only” brands are continually created to fill that space.

Can you create the top brand on the world’s top marketplace?

We are in a rare moment in time when you really might be able to.

In a search for “flashlights,” for instance, why isn’t it dominated by Maglight or Rayovac, like many retail stores would be? Have you ever heard of any of these? Some aren’t even branded!

EDITOR'S NOTE

As a private label seller, you are still responsible for respecting existing trademarks and patents and doing appropriate testing on your products.

Processes You Should Automate and Software to Help

Many new sellers make the mistake of focusing on the small stuff.

They are so eager to succeed on Amazon that they put all their effort into fine-tuning a single or handful of listings even though it makes almost no difference to the customer.

There is no software program that reshuffles your product images in different orders, rearranges your bullet points and A/B tests “cozy” versus “comfy” as adjectives in your listing title.

Yes, you want good listings with beautiful pictures. You want to generate some reviews.

But, with competition always on the same page and just a click away, remember that five minutes negotiating a better price with your supplier or using a cheaper shipping service is more valuable than spending 100 hours perfecting an Amazon listing.

Here are some tools you can use now.

1. Repricing.

Automatically change your price for an item (with parameters you set up front) to optimize sales velocity.

Appeagle: Inexpensive way to automate pricing, but very limited. Basically, it lowers your price from a base level if your competition lowers theirs.

Feedvisor: Very expensive algorithmic repricer that optimizes your margin by trying to win the Buy Box most of the time and takes into account other factors that affect who wins the Buy Box aside from price. Unlike any other repricer, it will raise your price (again, within limits) if you can still win the Buy Box despite the higher price. It also has a bunch of other great reporting and tools.

2. Inventory management.

Keep track of your Amazon vs. non-Amazon inventory and know when to reorder from suppliers.

Stitch Labs: Great integration of sales and inventory when selling across multiple channels, like a BigCommerce site and Amazon.

RestockPro: Simple but accurate and customizable methods for knowing where your Amazon inventory is, how much it is worth and when you need to reorder more.

4. Logistics snafu recovery.

Refund Retriever: Scans your FedEx and UPS bills for charges that should be waived due to them not honoring their guarantees. 100% variable cost (they simply get a portion of what they recover).

Refunds Manager: Audits your inbound shipments to Amazon to file claims for discrepancies (and they do happen). 100% variable cost (they simply get a portion of what they recover).

5. Shipping.

All ground services available for orders from all channels on one screen.

ShipStation: Easy set up, few bugs and integrates with any existing shipping accounts. Also, allows non-Amazon orders to be fulfilled with inventory at Amazon fulfillment centers with one click. I ship orders from my phone with their app daily.

6. Sales tax.

Compile sales tax data and file all in one place.

TaxJar: Simple, effective and low cost. Not what you associate with taxes.

7. Warehousing.

Store or even process your Amazon inventory as needed.

Flexe: Rent local storage space for as little as $5 per day. Take on larger orders or stock up for the holiday season without flooding your store or warehouse.

FBAPrep: Send your items (even straight from overseas) to be organized, QA’ed, packed and shipped directly to Amazon’s warehouses according to Amazon’s requirements.This allows you not even to touch the products you sell on Amazon.

The Benefits of Outsourcing Tasks to Help You Increase Sales

Listen, a lot of Amazon experts and courses will emphasize the value of pictures, bullet points and listing titles. I am not saying those are not important.

They are, as is:

Customer service.

Compliance.

Advertising.

Listing management.

You need to make sure all of these things get done and are done well.

But, you certainly don’t have to do them yourself.

1. Increase efficiency.

Are you genuinely adding value to or eliminating waste within the process (like using Amazon integrated shipping software or automating sales tax reporting) or are you trying to “hack” Amazon?

Make no mistake, Amazon doesn’t want to be tricked, so even something that works, for now, may not work in the future.

Stick with proven productivity enhancers like the software programs out there for sellers like you.

And always gut check yourself: “Are you productive or busy?”

Focus on productive to get the most efficiency.

2. Free up time for more important business activities.

The more you outsource, the more you can focus on increasing your margins, finding and negotiating better prices on products and with services and building out your longer term strategy for increased revenue.

If you are bogged down in the details, you can’t see the bigger picture.

1. Use Fiverr.

Want someone to research relevant keywords and add them to your listing? Just 5 dollars.

Need someone to scrape data from your site to add to your Amazon listing? $5.

EDITOR'S NOTE

This site also has a bad rap for having been the destination to get fake product reviews.

Do not pay for product reviews on Amazon.

2. Use UpWork.

Thousands of people with Amazon experience are available for custom jobs through Upwork.

The general process is:

Search for people with a particular skill set or simply post a job description and wait on applicants –– usually you will have two dozen within 24 hours.

Select candidates, submit any interview questions.

Choose a person to hire.

There are extensive reviews on most freelancers and Upwork has programs that allow you to monitor progress and keep the workers honest.

Many are well-versed in Amazon-specific tasks and can be hired for a single job or on an ongoing basis.

Users can create a stable of new freelancers that have delivered well in the past, helping you to build a network that is more and more efficient over time.

The productivity gains here are substantial.

3. Use FreeeUp.

Don’t have time even to worry about hiring people for specific Amazon activities? Of course not, you have been reciting your mantras.

Freeeup was created by an Amazon expert who created a corral of hundreds of Upwork freelancers. Freeeup assigns and manages your team freelancers based on the complexity of the Amazon services.

If you need to create listings, fulfill orders, advise on reorders and handle customer service, you can try to recruit all those people or just send a message to Freeeup and they will handle it all.

3. Hire a consultant.

Software and outsourcing services can help you execute your plan, but what if you need help developing your plan?

This book should give you a working knowledge of how to concoct an Amazon strategy, but invariably each business has its complexities and complications.

There are a handful of good Facebook groups and message boards, but for tailor-made solutions, consider reaching out to someone who walks the walk.

Executive Summary

In all, growing your sales on Amazon starts with getting smarter about your selling strategy as well as how you spend your time.

Determine if you will sell to Amazon or on Amazon.

If you will private label, if you will use FBA or you will fulfill yourself or through a 3PL solution that can get your products ready for FBA.

Then, focus on outsource manual, repetitive tasks so you can focus on growing margins through negotiation and finding better tools.

Now you’re ready to build yourself a 7-figure Amazon business.

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Andrew began his first importing business in 2005 at 19. Graduating as a double major with High Distinction from the Carlson School at 20, Andrew now owns and operates four businesses related to manufacturing, importing, private labeling, wholesale distribution, retail sales and third party marketplaces. His lifetime sales on eBay and Amazon are each in the 8 figures. His latest startup is AMZ Help, which offers unlimited Amazon consulting from a team of experts for a monthly fee. Now 31, he lives in Hidden Hills Preserve with his wife and two young children.